Correlation Between Newcrest Mining and HighGold Mining

Can any of the company-specific risk be diversified away by investing in both Newcrest Mining and HighGold Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Newcrest Mining and HighGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Newcrest Mining and HighGold Mining, you can compare the effects of market volatilities on Newcrest Mining and HighGold Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Newcrest Mining with a short position of HighGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcrest Mining and HighGold Mining.

Diversification Opportunities for Newcrest Mining and HighGold Mining

0.0

Correlation Coefficient

Newcrest Mining  HighGold Mining

Pay attention - limited upside

The 3 months correlation between Newcrest and HighGold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and HighGold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HighGold Mining and Newcrest Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Newcrest Mining are associated (or correlated) with HighGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HighGold Mining has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and HighGold Mining go up and down completely randomly.

Pair Corralation between Newcrest Mining and HighGold Mining

If you would invest (100.00) in HighGold Mining on December 30, 2024 and sell it today you would earn a total of  100.00  from holding HighGold Mining or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Newcrest Mining  vs.  HighGold Mining

Newcrest Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Newcrest Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Newcrest Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

HighGold Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days HighGold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HighGold Mining is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Newcrest Mining and HighGold Mining

The main advantage of trading using opposite Newcrest Mining and HighGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, HighGold Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HighGold Mining will offset losses from the drop in HighGold Mining's long position.

The idea behind Newcrest Mining and HighGold Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.